Are home buying companies legitimate?
Posted on December 1, 2020 by Jonathan Symcox
The popularity of home buying companies has been on a steady rise as they promise homeowners a quick sale as opposed to waiting for a suitable buyer to come along.
The idea of selling your home to a buying company for cash can be exciting when you need to sell your home fast for cash. Even then, most people put to question the legitimacy of these companies.
This article helps you to answer the question everyone is asking ‘are home buying companies legit’?
What are home buying companies?
Home buying companies are also known as quick house sale companies. They offer to help homeowners sell their houses fast usually within 7 days. To buy houses from homeowners who need to sell their houses fast for cash. They may buy the house directly or find a third-party buyer within a short time. Although these companies will offer to buy your house for cash, it is usually at a discounted rate from the market value.
Can home buying companies be trusted?
Home buying companies are in most cases legitimate property experts hence they can be trusted. However, they will not offer to buy your house for its full value because they may need to do some work on the property before they can sell or hold it for profit. The amount of money they offer for your home will depend on the cost of repair, upgrading or selling the house to a third-party. Thus, while they are willing to buy any house no matter its current condition, you’re unlikely to sell your house for its market value.
Since the quick house sale market is not regulated, consumers aren’t protected when transacting with home buying companies. Even then, the National Association of Property Buyers (NAPB) requires all members to register with the Property Ombudsman (TPOS) and abide by the code of practice. This means that you can seek redress when dealing with home buying companies that are registered with TPOS or have an NAPB membership. The property Ombudsman ensures high standards are maintained in the quick house sale sector.
How to avoid home buying company scams
It’s common for smart people to be tricked into quick house sale scams. Thus, you need to spend some time and do due diligence before committing to selling your house to a quick. You need to know the questions to be sure you’re dealing with a legitimate company and that you’re also getting the best deal possible. Here are some of the things to look out for:
- Company credentials. Check that the home buying company is registered with the Property Ombudsman. If they claim to have signed up to a code of practice or are governed by an official body, ask to see the documentation.
- Membership to the National Association of property buyers. Check that the home buying company is registered with the National Association of Property Buyers.
- Work with an independent legal advisor. Always have your legal representative to help you navigate the process.
- Read and understand the agreement. Take time to read and understand the agreement so that you’re sure about what you’re agreeing to. Let your solicitor explain any clauses that you’re not clear about.
- Do an independent valuation. Get your property to be valued by three independent estate agents so you decide whether the offer from the home buying company is fair.
- Ask to see the survey. If the home buying company offers you a much lower price, request for the survey findings. A fair dealing company will share the report with you.
- Don’t commit too early in the process. Don’t be in a rush to sign the agreement until you’ve done all the legal checks and surveys.
Pros and cons of using home buying companies
We buy any house companies are a good alternative when you want to sell your house fast. Selling to a home buying company is ideal when you want to:
- Sell property due to divorce
- Avoid repossession
- Dispose of inherited property
- Relocate due to a change in job
- Move for health or age-related reasons
- Are unable to sell property through a traditional agent
Some disadvantages of selling a house to a home buying company that includes the following:
- Lower sale price. You will have to sell your house at a lower price than you would be selling through estate agents.
- False valuations. Some companies will value your property too low so make sure you get an RICS surveyor to conduct an independent survey.
- Rogue traders. You need to research the home buying company to avoid dealing with rogue traders.
When dealing with a home buying company, take time to do a thorough background check of the company to ensure they are a legitimate entity before transacting with them.